NCBA Group profit rises by 12% as lending, deposits grow

KAMPALA — NCBA Group Plc posted a 12.2 percent increase in first-half net profit, buoyed by stronger lending, higher customer deposits and growth in digital banking, even as it set aside more money to cushion against potential bad loans amid a challenging economic environment.

The regional lender reported net profit of KSh12.4 billion (about Shs353.4 billion) for the six months ended June 30, up from KSh11 billion (about Shs313.5 billion) recorded during the same period last year.

Pre-tax profit rose 14.3 percent to KSh15.5 billion (about Shs441.8 billion), while operating income increased 15.1 percent to KSh40.7 billion (about Shs1.16 trillion).

The results highlight the resilience of East Africa’s banking sector despite persistent inflationary pressures, elevated borrowing costs and cautious monetary policies across the region.

NCBA, which operates in Uganda, Kenya, Tanzania and Rwanda, continued to expand its balance sheet during the period, with customer deposits growing 11 percent to KSh551 billion (about Shs15.7 trillion). Total assets also increased by 11.5 percent to KSh739 billion (about Shs21.1 trillion).

The group’s board approved an interim dividend of KSh3.75 (about Shs107) per share, up 50 percent from KSh2.50 (about Shs71) declared a year earlier, signalling confidence in the lender’s earnings and capital position.

However, the lender also increased provisions for expected credit losses, with loan-loss charges rising to KSh5.2 billion (about Shs148.2 billion) from KSh3.2 billion (about Shs91.2 billion) as it prepared for a more uncertain operating environment.

“The first half of 2026 was marked by a dynamic operating environment with pressure on inflation and a cautious policy approach by the regional central banks,” Group Managing Director John Gachora said.

“Our balance sheet momentum remained strong, anchored on disciplined growth in quality lending and stable funding provided by customer deposit growth,” he said.

“We have increased provisions to KSh5.2 billion reflecting the realities of the current operating environment, which positions us well to absorb potential risks.”

The group’s capital position remained strong, with a capital adequacy ratio of 21.7 percent, comfortably above regulatory requirements. Return on average equity stood at 19 percent.

“We are encouraged by the strength of our return on average equity while maintaining a strong capital adequacy position, providing a solid foundation to support future growth and strategic investment opportunities,” Gachora said.

Digital banking remained one of the group’s fastest-growing businesses during the period. Digital loan disbursements rose 26.9 percent to KSh819 billion (about Shs23.3 trillion), while mobile banking accounted for 94 percent of all customer transactions.

To support its digital transformation strategy, NCBA invested KSh2.4 billion (about Shs68.4 billion) in technology, strengthening artificial intelligence capabilities, cybersecurity and digital infrastructure. The investments helped maintain system availability of 99.68 percent.

Kenya remained the group’s largest earnings market, with the banking subsidiary posting a 24.3 percent increase in profit to KSh13.7 billion (about Shs390.5 billion).

Regional operations in Uganda, Tanzania and Rwanda generated a combined profit of KSh1.6 billion (about Shs45.6 billion), supported by a 25 percent increase in lending across the markets.

The group’s diversified businesses, including investment banking, leasing, insurance and bancassurance, reported combined earnings of KSh1.1 billion (about Shs31.4 billion), representing a 40 percent increase from the same period last year.

NCBA also expanded its assets under management to KSh101 billion (about Shs2.88 trillion), while its SME loan portfolio grew 12 percent to KSh44.7 billion (about Shs1.27 trillion), reflecting sustained demand for business financing across the region.

Investors are also closely watching the lender’s proposed acquisition involving South Africa’s Nedbank Group, one of the region’s biggest banking transactions this year.

The bank said the tender offer closed on July 10 after attracting shareholder acceptances equivalent to 121 percent of the targeted shares. Completion of the transaction remains subject to regulatory approvals and other closing conditions.

Looking ahead, Gachora said global economic uncertainty could continue weighing on growth prospects but expressed confidence that stronger private-sector credit demand and regional expansion opportunities would support the group’s performance during the second half of the year.

“While the global macroeconomic environment signals uncertainty leading to a softer growth projection of 3.1 percent for 2026, the investor landscape remains vibrant with major regional expansion transaction deals expected to close in the second half of the year,” he said.

“We remain confident in our ability to unlock new growth opportunities that will generate enduring value for customers, shareholders and the communities we serve.”